Adam Boulton (Sky News): This coming week will undoubtedly be the coalition Government’s most important yet, the announcement of the Strategic Defence and Comprehensive Spending Reviews will frame the terms of British politics and society for years to come. Well joining me now from his official country residence in Chevening is the Foreign Secretary William Hague. Thank you for being with us Mr Hague.

William Hague (Foreign Secretary): Good morning.

AB: The first aspect of this we’re going to get is this National Security Strategy but isn’t the reality that the National Security Strategy is a case of cutting our cloth according to having frankly less cloth to go round so, inevitably, what ever you conclude Britain will be less well defended at the end of it?

WH: No, of course it has to fit in to the financial situation, we have to find savings in the defence budget like most other budgets but the biggest problem we’ve had actually is not finding some savings it is dealing with the terrible legacy that we inherited of a defence budget that is thirty eight billion pounds over committed. The last Government entered in to commitments for which they didn’t have the money to the extent of ten million pounds for every day for the next ten years.

And so sorting that has been very difficult, there is no doubt about that, that has been a very difficult process. But at the end of it we will make sure this country is properly defended, that we continue to have an independent nuclear deterrent, formidable intelligence agencies, highly deployable armed forces so we will remain a global player, we will remain a serious military power in NATO and in the world. But has it been a difficult process? Yes it has.

And we’ll do more than that which is to make sure this country is properly equipped with twenty first century difficulties and that means we’ll invest more in some areas such as cyber security; cyber attacks are becoming an increasing threat not only to Governments but to national infrastructure, to businesses, for people’s own personal financial security. So we will have to put more in to some areas like that.

AB: But it does follow doesn’t it that if you’re spending less, you say we can’t afford it or it was unfunded, your capability will diminish and, and for example something like the Falklands conflict which Britain waged back in the 1980s, I mean, it simply wouldn’t be possible to do that again would it with a navy of twenty ships?

WH: Well the Falklands is now protected in a different way from 1982, there is a permanent garrison there. We have fighter aircraft there all the time, we have proper radar defences of the Falklands and this, this country will continue to have some of the most formidably well equipped warships and some of the deadliest hunter killer submarines, that is the Astute class of submarines that are being built now …

AB: Yes but I …

WH: … of any country in the world.

AB: … (indistinct) what I’m talking about is that sort of projection around the world of, of military force for a specific reason, we wouldn’t be able to do that under the new plan.

WH: Well again, well no I don’t really agree with that because look there we are in Afghanistan, we have a huge deployment in Afghanistan as, as everybody knows our troops are working so hard and so valiantly in Afghanistan and one of our priorities in this review has been to make sure that what is needed on the frontline in Afghanistan will be there. We’ve, in fact we’ve doubled the operational allowance for our forces in Afghanistan and that, that will be there over the coming years.

So we will continue to be able to deploy forces in very serious numbers elsewhere in the world, of course not, we’re not a military power of the same nature as the United States but in, when you compare us to other European countries we will still have the ability to do that and be in the first rank of the countries that can do that.
AB: But we will be dropping behind. We’ve had Robert Gates, the American Defence Secretary, talking about European capability being hollowed out, we’ve had Hillary Clinton expressing concern as well. You know if the first duty of any Government is the defence of the realm you are, surely, through your cuts slipping in that?
WH: Well we have to do our best to adapt to new threats as I say like cyber attacks and to make sure that we can afford what is actually being committed to. We don’t do ourselves any favours as a country by starting on military projects that we don’t have the money for and that was the behaviour of the previous Government. The, the management of the aircraft carrier project by the previous Government is staggering in its incompetence; embarking on building them without knowing where the money would come, then delaying them as a result with the, with the consequence that the costs went up enormously further. I mean we, we are not going to behave in that way …
AB: I mean has, has …

WH: … but we will make sure …

AB: … Hillary Clinton directly …

WH: … at the end of the …

AB: … expressed to you her concerns about Britain’s plans?
WH: We, Hillary Clinton and I discussed on Thursday in Brussels at the NATO meeting British defence spending and European defence spending. She did, indeed, express her concerns about Europe in general and NATO in general not specifically about Britain …

AB: But including Britain.
WH: … and so I’ve, I’ve, well not specifically about Britain and I, I’ve described to her the nature of what we’re doing just in, as I’m describing it to you, and I think the United States is reassured by that, that we will retain a wide spectrum of military capabilities. Anyone in office in the United States appreciates just how much Britain does in the world and we will be continuing to be a big contributor to NATO and to the collective defence of all NATO nations.

AB: You say, for example, that the previous Government mismanaged the aircraft carrier project but to most people it will seem a bit odd to carry on building aircraft carriers and not to have fighter aircraft on them.

WH: Well await the announcements is all I can say about that, the Prime Minister will set this out in detail later on this week how we’re going to approach this. It has, as I say, been a terrible problem to untangle because not only did they do all those things with the aircraft carrier but it, they then left us without, with building aircraft carriers that are not interoperable with our allies, that can’t be used for United States or French planes to land on them. So we have had to do a lot of work sorting that out and the, the result of that will, of course, be presented later this week.
AB: But isn’t the real truth when you look at the defence budget what’s
going to remain of it the Government’s priorities are going to be prestige projects of questionable value such as the aircraft carriers, such as Trident as envisaged while our actual basic strategic capabilities are going to diminish?

WH: Again I would await the announcements if I were you about that. No we will continue to have a wide range of strategic capabilities and be adapting to the threats of the future, I really do want to stress this, this is central to our national security strategy to having a holistic national security approach. We have to think about the dangers of terrorism, we have to think about the dangers of cyber attack as well as the traditional thinking about conflict between states and whether Britain and our allies could be drawn in to such conflicts.

So that requires in many ways more flexible armed forces, it requires us to really make sure we’re there in the information age not just in the sense of large, as you say, prestige projects. So we have been tackling all of that and that will be reflected in the National Security Strategy and the Strategic Defence and Security Review which will be announced over the next couple of days.

AB: Well let’s just take one threat, for example Iran. We know that President Ahmadinejad has been in Lebanon this week and yet it appears that Europe’s response to that is to hold out some kind of hand of friendship.

WH: We’re holding out the prospect of negotiations, not just Europe but, but the United States and Russia and China. We met, the, the six Foreign Ministers, the so called E3 plus 3, we met in New York a few weeks ago and we’re absolutely agreed that we want to, that we offer Iran negotiations but at the same time as sanctions, at the same time as tough sanctions which I believe Iran is now considerably worried about.

Now Iran has said that they will enter, the Iranians have said they will enter negotiations and we now want the dates for those negotiations and we want them to be about the whole nuclear programme. But while those negotiations are awaited and, indeed, while they go on the sanctions on Iran will be tightening. So this is in no way a softening or loosening of policy, it’s a twin track approach of saying to Iran there are, there are more sanctions coming down the track which effect your nuclear programme and may effect your wider economy in some ways but there’s also the offer of negotiations.

And I think that is the right way to try to find a peaceful solution to Iran’s development of its, of a nuclear weapons programme.

AB: But a peaceful solution’s really the only possibility isn’t it because military intervention seems to be unthinkable particularly with a diminished force?

WH: I’m certainly not calling for a military intervention but none of us in, among the NATO countries have ever taken off the table the prospect of a possibility of military action, it would be wrong to do that because that would relieve pressure on the Iranian leadership but yes we want a peaceful and diplomatic solution to this. It was one of the reasons we want to find that diplomatic solution is that so that other nations don’t take it upon themselves to launch a military attack which would have wider consequences for the peace of the world.

AB: I want to ask you about soft power; your Government has put itself very strongly behind the bid for the World Cup in 2018, do you think that, that Britain’s chances of getting that are diminished by our refusal to pay bribes?

WH: Well one would hope not. Certainly we’re putting a lot of energy in to this World Cup bid, the Prime Minister and I and the Sports Minister and others across Government have been lobbying for this bid. We will, of course, only do so in an absolutely correct way so you’re quite right to say in your question we will not be paying any bribes.

It’s disturbing to read what we read in today’s newspapers, I don’t know the truth of that but these are serious allegations and, of course, we want all the, all the proceedings of the World Cup bid to be carried out in a way that is ethically correct and that therefore means everybody can respect the process and respect the result. And I would call on all nations involved to carry out these proceedings in that way.

AB: But know, knowing what we know about FIFA do you think that the President of FIFA really is a, a fit person to be feted in Number 10 Downing Street by the Prime Minister?

WH: Well look we, we are, we want to win the World Cup bid, we want to bring the World Cup to Britain so, of course, we have to deal with the people leading FIFA but as to all the allegations that are made today I don’t think you can expect me to give a instant judgement on them all but I would just say we’re very disturbed by those allegations.

Britain, whatever happens and whatever other countries do, we’ll deal with this in a correct way doing absolutely nothing corrupt, paying no bribes and not corrupting this system in any way.

AB: William Hague thank you very much indeed for joining us from Chevening.